ISLAMABAD: Unregulated trucking business in Pakistan needs govt attention, reports WealthPK quoting Economic experts on Sunday.
According to the report, a robust freight transportation system plays a crucial role in a country’s economic growth.
Rail and road transportation has expanded manifold in Pakistan over the past years thanks to the country’s economic integration across borders.
According to Pakistan Economic Survey 2018-19, the transportation sector contributed about 13% to the GDP and provided approximately 6% of employment in the country, WealthPK reports.
While road and rail are the two main modes of freight carriage in Pakistan, operations done through road account for 96% of the total freight transportation.
And, market fragmentation has placed the trucking sector at the centre of Pakistan’s freight transportation system, WealthPK reported.
However, the truck manufacturing industry is still mostly informal, and any reliable information on it is difficult to find.
Against this backdrop, the then government had introduced the trucking policy in 2007, recognising the fact that most of the fleet of trucks plying in Pakistan was a composition of two and three axel vehicles assembled in backstreets without maintaining the quality standards.
These informally manufactured trucks were not only harmful to the environment but also consumed more fuel and damaged road infrastructure.
The 2007 trucking policy was initiated to document, regulate and formalise this sector. However, unfortunately, the policy could not be implemented effectively.
It is noted that truck bodies are mostly manufactured without ensuring adherence to the international standards, and in most cases, trucks are fitted with used and under-performing engines.
According to the National Transport Research Centre (NTRC), there are a total of 354,220 registered trucks in Pakistan with 45% of them being the models dating back to the 80s or even earlier.
Meanwhile, according to Freight Transport for Development Tool Kit, the informal trucking sector has many small operators and just a few large- and medium-sized ones. It is estimated that 79% of owners own one to five vehicles, 20% of them are fleet owners with more than 10 vehicles, and only 1% of them own a fleet of more than 100 vehicles.
The small-sized (1-5 vehicles) trucking companies are unregistered and thus non-taxpayers despite the fact that they are the most important players in the country’s informal transportation sector.
According to WealthPK, the dynamics of freight operations in Pakistan are different from the rest of the world, where railways are the primary mode of freight operations, whereas 96% of freight traffic is carried through trucks in Pakistan.
This puts immense pressure on roads, causing wear and tear every now and then.
It is reported that overloaded trucks are a major contributor to premature road failure causing undesigned damage to pavement structure, which ultimately leads to an increased maintenance and rehabilitation cost.
The mushrooming growth of the unregulated and undocumented trucking business is a challenge for the government to bring it into the tax net and improve the country’s financial position.
According to the Labour Force Survey 2017-18, the informal sector outside agriculture accounted for 72% of the employment. Wholesalers, construction and transportation sectors are the three most important sectors of the informal economy.
The government needs to ensure regulation and documentation of the trucking sector by implementing the 2007 trucking policy in its true spirit.
